Strategy letter
Protecting yourself from rising taxes and market volatility
A max-funded, tax-advantaged insurance contract — without putting hard-earned money at risk in the market.
From the desk of Doug Andrew
Shared with clients of Rockwell Financial Services
Dear Friend,
If you’re planning on retiring in the near future (or are already in retirement), what youre about to read has the potential to make your golden years the most comfortable and secure years you have ever experienced.
Have you noticed that things aren’t the way they used to be? Remember 2000 to 2010? That lost decade was a crushing blow when retirement and home values hit bottom. Most Americans lost 38% in the value of their IRAs and 401(k)s from 2000–2003. It took four more years just to recoup what they lost.
Traditional IRAs and 401(k)s are tax-deferred, not tax-free. Paying tax on the seed, not the harvest, is the idea behind a properly structured, maximum-funded indexed universal life contract.
Protect yourself from increasing taxes
When structured properly and funded correctly, a max-funded, tax-advantaged insurance contract can help in four ways: premiums after tax at today’s rates; access via policy loans that, when done correctly, are not treated as taxable income; tax-favored accumulation while the policy remains in force; and a death benefit that generally transfers income-tax free. See IRC §§7702, 72(e), and 101(a).
Life insurance is not an investment and should not be purchased as an investment vehicle or instrument. Guarantees are backed by the issuing insurer, not by Rockwell Financial Services. Alpesh Kachhadiya is a licensed life insurance professional in Rutherford, New Jersey.